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Why Is Boston Omaha Soaring on Wednesday?

By Matthew Frankel, CFP® – Sep 22, 2021 at 2:44PM

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The up-and-coming conglomerate is spiking higher.

What happened

The stock market was having an excellent day on Wednesday, with all three major averages higher by 1% or more at 2 p.m. EDT. However, Boston Omaha (BOC -4.44%) has been a major standout with its shares up by more than 17% after rising nearly 10% the day before.

So what

There isn't any company-specific news driving the move higher today, but we're sure seeing quite a bit of volume. By 2 p.m. EDT, more than 189,000 shares of Boston Omaha had changed hands, while the average full-day volume in the stock is around 90,000.

Analyst pointing at financial chart on computer screen.

Image source: Getty Images.

One potential explanation for the surge in investor interest is a Barrons article published on Sunday that highlighted the fact that Boston Omaha's co-CEO Alex Rozek is Warren Buffett's grandnephew, and that he is beating the returns of his great uncle's company Berkshire Hathaway (BRK.A -0.97%) (BRK.B -0.93%) so far this year.

To be fair, the article emphasizes that it isn't a fair comparison. After all, Buffett has a track record of stellar returns that extends back to the mid-1960s. But it could explain a sudden surge of investor interest in a company that looks a lot like an early-stage Berkshire Hathaway.

Now what

Just because there isn't any company-specific news driving Boston Omaha higher it doesn't mean that it's not a justified move. Boston Omaha's second-quarter results looked spectacular, its SPAC recently found an acquisition target, and its fast-growing broadband business launched a new subsidiary last week, Fast Fiber Homes, which has the potential to build a massive recurring revenue stream.

Matthew Frankel, CFP owns shares of Berkshire Hathaway (B shares) and Boston Omaha Corporation. The Motley Fool owns shares of and recommends Berkshire Hathaway (B shares) and Boston Omaha Corporation. The Motley Fool recommends the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), short January 2023 $200 puts on Berkshire Hathaway (B shares), and short January 2023 $265 calls on Berkshire Hathaway (B shares). The Motley Fool has a disclosure policy.

Stocks Mentioned

Boston Omaha Stock Quote
Boston Omaha
$26.50 (-4.44%) $-1.23
Berkshire Hathaway Stock Quote
Berkshire Hathaway
$464,157.97 (-0.97%) $-4,542.03
Berkshire Hathaway Stock Quote
Berkshire Hathaway
$307.69 (-0.93%) $-2.88

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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